By Jill Wilder
As we all know, budgeting for 2022 will present some challenges. Without a crystal ball, we will have to use our knowledge to find new ways to plan our future.
While historic pilots have helped hoteliers in previous years with their future planning, it’s a whole new ball game today, as the way a hotel operates is drastically different from what it used to be. barely a year. As in the past, simply comparing departmental profits from previous months is only one piece of the puzzle. To have better and more accurate budgeting numbers for the year ahead, hoteliers need to re-evaluate their engines and establish a new set of baseline data.
Here’s why: Before COVID, the most common factors when working in budgets and forecasts were “per room occupied” and “percentage of revenue,” with very standardized values. By simply adjusting room occupancy values, expenses and income would automatically be recalculated and changed accordingly. Today, hotels are different, with one key difference due to staff and capacity limitations. In many situations, cleanliness is key, and the time it takes for a cleaning lady to complete her chores is drastically different. Therefore, “per occupied room” will not be the only way to calculate their hours. Should you consider a “per check-in or check-out” as a driver? How does the stay with cleaning versus the stay without cleaning impact the cleaning lady’s hours? In the area of income from food and drink, how has the number of covers / values of occupied rooms changed, and should there be an exit capacity which must now be included in the income calculation by meal period?
What should be considered for other operating expenses? For example, customer supplies were $ 1 per room occupied in 2019. Is it now better to just consider increasing this value to cover the rising supplier costs or should we look at the number of registrations? daily budgeted in addition to increased costs? In this situation, using multiple drivers for a calculation can provide a more accurate value.
Rather than copying and pasting previous year’s engine values into the 2022 budget and forecast hoping you hit the target, reconsider what new drivers and / or values are driving your hotel. Use your experience to create new pilots and rely only on history as a guide. This effort will provide you with a better starting point for years to come.
The best way to budget and forecast accurately and avoid trying to explain what’s going on financially to an owner is to use a financial management software company that offers business intelligence, budgeting, and business intelligence systems. web-based back-office which are 100% specific to the hospitality industry. . Not only will this technology partner help each property re-evaluate their existing engines, but they will identify new engines that match the relevant data sets.
Deploying the right solutions for corporate accounting, business intelligence, budgeting and forecasting will help operators better prepare for change. Since most management contracts and bonuses are based on correctness of what is expected, there is no time like the present to make a change, especially for properties that are still writing and s ‘rely on individual Excel spreadsheets to achieve their goals.
At the end of the day, we all aim for precision. By automating the budgeting and forecasting process, hoteliers will have a source of truth.
It’s largely obvious that it’s still not business as usual. As a result, hoteliers need to make drastic changes if they hope to successfully reopen. Re-evaluating the engines of a hotel is a critical first step towards financial stability. The most accurate way to compare plan with performance is to automate hotel budgeting and forecasting processes with a flexible solution proven to improve accuracy and set realistic goals for the hospitality business.
Jill Wilder is Vice President of Aptech Computer Systems Inc., a provider of a fully integrated enterprise accounting, business intelligence and planning ecosystem for the hospitality industry.
This is a contribution to Hotel, written by an industry professional. The thoughts expressed are the point of view of the signed individual.